Drive Green: Company Car Tax Shift

Drive Green: Company Car Tax Shift is a groundbreaking policy proposal to reduce vehicle greenhouse gas emissions and air pollution.

Modeled on a successful program introduced in the United Kingdom, the proposal is designed to:

- Reduce greenhouse gas emissions by one megatonne of CO2 per year
- Reduce the pollutants that cause smog
- Reduce fuel costs for businesses and employees
- Avoid job loss in Canadian automobile assembly plants
- Retain current income tax revenue

Drive Green encourages employees to drive more fuel efficient company cars (pick-up trucks are excluded) by shifting some of the tax burden from efficient cars to those that pollute more.

Under current tax rules, employees who receive company cars pay additional income tax based on the cost of the vehicle. Under the Drive Green proposal, employees who drive lower emission company cars would enjoy a tax reduction, while those who choose less efficient cars would be taxed at an increased rate.

This kind of policy, known as ecological fiscal reform (EFR), helps improve economic efficiency by correcting the prices of goods and services to include costs born by society as a whole, such as increased health care costs due to air pollution.

Drive Green, prepared by MK Jaccard and Associates for the David Suzuki Foundation, projects economic and environmental impacts over the course of the next 15 years. It is the first in a series of policy proposals from the David Suzuki Foundation designed to help Canada achieve sustainability within a generation.